The UK's Financial Conduct Authority (FCA) and the Bank of England (BoE) have issued a joint Call for Input on tokenisation in wholesale financial markets, aiming to clarify how tokenised assets built on distributed ledger technology (DLT) should be handled across collateral, settlement and existing legal frameworks. Submissions are open until July 3, 2026. The regulators plan to publish a feedback statement in summer 2026. At the core, the FCA and BoE are seeking views on how tokenised versions of traditional instruments fit within the UK's current regulatory perimeter. The consultation focuses on three areas: the regulatory treatment of tokenised exposures, how tokenised assets operate as collateral, and how settlement instruments should function in a DLT-native environment. The consultation comes as the UK's Digital Securities Sandbox continues live activity. The programme is supporting 16 firms involved in real-world issuance and settlement of tokenised securities. On market infrastructure, the BoE is working to extend operating hours for its Real-Time Gross Settlement (RTGS) system and the CHAPS payment system to near 24/7 availability. The move could reduce delays and costs in cross-border payments, where time-zone gaps have long been a source of friction. Policy work also points to a broader ambition to position the UK as a tokenisation centre. The government is exploring sovereign debt issuance via DLT, which could allow gilts to be issued, traded and settled on distributed ledger rails. In parallel, plans to regulate systemic stablecoins in a way comparable to bank deposits would bring them within the banking regulatory framework. For investors, the 16 firms already operating in the Digital Securities Sandbox are likely to have an outsized role in shaping eventual rules. With responses due by July 2026 and feedback expected that summer, formal rulemaking is unlikely to begin before late 2026 at the earliest.

South Korea's Financial Intelligence Unit (FIU) is preparing to tighten cryptocurrency oversight by introducing a reporting obligation for overseas crypto transactions exceeding 10 million won (about $7,200), according to Edaily. The plan also includes tougher verification of KYC information and an expanded application of the Travel Rule. The FIU is set to hold its first roundtable on May 19 with the CEOs of the country's five крупнейшие exchanges—Upbit, Bithumb, Coinone, Korbit and GOPAX—alongside the Digital Asset eXchange Alliance (DAXA). Some industry observers in South Korea caution that mandatory "full reporting" for high-value transfers could amount to overregulation, potentially pushing users and liquidity to offshore platforms. They argue regulators should prioritize detecting suspicious transaction patterns over relying on fixed monetary thresholds.

Minnesota is moving to fold digital-asset custody into its local financial system. Governor Tim Walz has signed House File 3709, updating the state's banking laws to allow state-regulated banks and credit unions to provide cryptocurrency custody services beginning Aug. 1. The measure permits state-chartered financial institutions to hold digital assets for customers, while specifying that client assets may be reflected on customer accounts but cannot be treated as the institution's own assets. The law requires strict segregation so customer holdings are not commingled with institutional assets and may not be reported as bank funds on the balance sheet. House File 3709 also allows banks and credit unions to work with third-party service providers and subcustodians, provided segregation and related compliance obligations are maintained even when custody functions are outsourced. State Rep. Bernie Perryman, a sponsor of the bill, has said the goal is to help Minnesota's local institutions meet changing customer demand and reduce reliance on out-of-state or offshore providers with weaker oversight. Government data cited by CoinDesk show that as of May 2025, Minnesota's 240 state-chartered, deposit-taking commercial banks held about $128 billion in assets. The state also has 82 credit unions that belong to the Minnesota Credit Union Network, suggesting the new rules could influence digital-asset strategies across a broad share of in-state institutions. Walz also signed another digital-assets measure, House File 3642, on May 5. That bill prohibits digital-asset kiosks and ATMs in Minnesota after fraud incidents targeting residents. At the federal level, crypto firms are continuing to pursue banking and custody licenses. Payward, the parent company of Kraken, said earlier this month it applied to the Office of the Comptroller of the Currency for a national trust charter, seeking approval to offer custody services focused primarily on digital assets.

Galaxy Digital said May 18 that the New York Department of Financial Services (NYDFS) has issued its subsidiary, GalaxyOne Prime NY, both a BitLicense and a Money Transmission License. The approvals allow the firm to provide regulated digital-asset trading and custody services to institutional clients statewide, including registered investment advisers, hedge funds and family offices, through a platform overseeing roughly $9 billion in client assets. CEO Mike Novogratz said New York represents the nation's deepest pool of institutional capital and that digital assets are increasingly becoming part of those portfolios, positioning the licenses as a strategic entry into a highly concentrated allocator base. The BitLicense framework, introduced in 2015, is among the toughest U.S. regulatory regimes for crypto firms, featuring capital requirements, ongoing compliance examinations and cybersecurity oversight. Roughly 40 companies have been approved since launch, highlighting the selectivity of NYDFS. With the new authorization, Galaxy gains a direct pathway to the largest cluster of U.S. hedge funds and investment advisers. The firm also noted that its research team, led by Alex Thorn, has been monitoring institutional allocators as key drivers of Bitcoin and broader crypto allocations through 2026. Galaxy is the second company to receive a BitLicense in 2026, following payments firm Strike in March. It joins a list of prominent license holders including Coinbase, Robinhood, Circle and PayPal. The approvals also extend Galaxy's regulatory reach, which the company said now includes more than 50 licenses globally. The development comes as Galaxy expands datacenter and AI infrastructure alongside its digital-asset platform. The New York clearance brings one of the world's largest institutional capital pools within reach of a company that reported record Global Markets results last year and has been scaling its datacenter operations. Market reaction was subdued. Galaxy shares fell 2.36% to $28.91 in Monday premarket trading, in line with broader market weakness. NYDFS approval strengthens Galaxy's ability to compete for institutional trading and custody mandates in the most important U.S. market for asset managers and hedge funds as institutional crypto adoption continues to advance.

The White House is reviewing whether to repeal a decades-old rule aimed at ensuring investors receive the best available prices when executing stock trades, according to Bloomberg.

The U.S. Securities and Exchange Commission could introduce an "innovation exemption" tied to tokenized stocks as early as this week, Bloomberg reported.

The U.S. Securities and Exchange Commission is expected to unveil a new framework as soon as this week that could open the door to blockchain-based trading of digital versions of publicly listed stocks. The update is drawing attention to Ondo Finance, which has already rolled out more than 200 tokenized U.S. stocks and ETFs on-chain through Ondo Global Markets, positioning it as an early builder of an on-chain equities ecosystem in the U.S. Since the report surfaced, ONDO has gained 10%. Market participants say that if the proposed "innovation exemption" is implemented, Ondo Finance could emerge as a key platform for a compliant, real-world on-chain stock market in the United States.

Author: Shenchao TechFlow Bloomberg Law reported Monday that the U.S. Securities and Exchange Commission could publish its long-anticipated "Innovation Exemption" framework for tokenized stocks as soon as this week. The most consequential signal is tucked into a concurring view: tokenized versions of public equities may be allowed to trade even without the underlying company's approval. If that interpretation holds, stocks such as Tesla, Apple, and NVIDIA—so long as they remain listed on U.S. exchanges—could be tokenized and traded onchain as "tokenized TSLA" and similar products without prior notice or consultation. Issuers could publicly distance themselves, but such statements would not necessarily stop secondary trading. Why this matters: a flashback to July 2025 The contours of today's debate were previewed last July, when Robinhood unveiled "Stock Tokens" for EU users at Cannes, pitching 24/7 blockchain trading tied to more than 200 U.S. public companies. The rollout escalated when Robinhood also promoted token giveaways linked to OpenAI and SpaceX—two private companies—with a combined value of $1.5 million. OpenAI quickly rejected the association on X, stating that the "OpenAI tokens" were not equity, that OpenAI had no partnership or involvement, and that any transfer of OpenAI equity requires its approval—approval it said had not been granted. Robinhood responded that the tokens were pegged to an SPV holding OpenAI shares, effectively framing the product as a derivative. The Bank of Lithuania, Robinhood's main EU regulator, later requested clarification on the legality of the structure. At the heart of the dispute was a simple question: can a third party use a company's equity as the reference or collateral for tokenized products when the company explicitly objects? At the time, many viewed Robinhood as pushing boundaries. Eleven months later, the SEC appears poised to answer: yes—and under a formal framework. How the SEC is getting there SEC Chair Paul Atkins has been in the role for a year, and his policy direction has consistently pointed toward an onchain securities pilot. In an April 21 speech at the Economic Club of Washington, Atkins said the SEC planned an "Innovation Exemption"—a 12-to-36-month regulatory sandbox that would permit onchain trading of tokenized securities without full registration, in exchange for constraints such as volume caps, whitelist-based access, and periodic reporting. An earlier signal came in a legal memorandum submitted to the SEC's Crypto Task Force on January 22, describing three tokenization models for U.S. stocks: 1) Direct issuance: issuers record equity directly onchain, requiring issuer approval. 2) Custodial token model: a third-party custodian immobilizes existing shares and issues corresponding onchain tokens, without needing issuer consent because the original securities remain intact. 3) Synthetic model: tokens track stock prices via derivatives, with no required issuer approval and no direct linkage between token and underlying security. The SEC's emerging posture effectively validates the latter two approaches. That would put issuer-partnered players such as Galaxy and Superstate on the same regulatory footing as "permissionless" models associated with Robinhood. Regulatory arbitrageurs may welcome the shift; CFOs and corporate counsel at public companies may see it as a governance and market-structure headache. Winners and losers Likely beneficiaries include: - Onchain brokers and decentralized exchanges. If the exemption framework legitimizes non-consensual tokenization models, last year's OpenAI-related backlash becomes less of a compliance liability for similar products. - DeFi infrastructure. If tokenized U.S. stocks can trade through AMMs, it could pull a slice of Nasdaq-style liquidity closer to venues like Uniswap and Curve. - Early RWA-focused platforms. Projects such as Ondo, Backed, Securitize, and others have positioned for exactly this type of regulatory opening. - Global retail traders. The U.S. equity market could effectively move from 6.5 hours a day to 24/7 access. Potentially disadvantaged parties include: - Public companies. Tokenization without issuer consent can create an external "shadow market." If onchain pricing diverges from listed shares, or if token structures introduce confusion over governance rights or shareholder activism, the fallout is likely to land on investor relations and legal teams that have no direct control over the product. - Traditional broker-dealers and post-trade utilities. Tokenization implies a path that could reduce reliance on DTCC-style clearing and settlement. - The SEC's more conservative wing. Commissioner Hester Peirce has repeatedly emphasized that "tokenized securities are still securities." She supports tokenization but has warned against using it to bypass core investor protections. Allowing tokenized trading without issuer consent could become a major internal fault line. Open questions that will shape the outcome The core promise of tokenized stocks is what becomes possible once equities are onchain: collateral use, structured portfolios, tighter integration with stablecoin liquidity, and repeated wrapping across DeFi. Yet those advantages depend on design. If the exemption imposes tight whitelist restrictions, trading volume limits, and strict KYC thresholds, DeFi composability could be sharply reduced—creating an onchain stock market with meaningful constraints rather than a fully interoperable, global, 24/7 DeFi-native instrument. Key details to watch before the SEC publishes the final text: - Who qualifies for the whitelist: only accredited/qualified U.S. investors, or broader retail access? - How cross-border coordination will work. - Whether EU MiCA-regulated tokenized stocks could conflict with tokenized stocks issued under a U.S. innovation exemption. - If issuers sue, whether the exemption provides meaningful legal cover for third-party token issuers. - What happens after the 12–36 month sandbox: permanent approval, or a shutdown. For decades, a company's trading venue, hours, and market structure were largely shaped by issuers and exchanges. The SEC's move would shift part of the decision-making over "how a stock trades" away from the issuer. Last year, Robinhood was criticized in Europe for racing ahead of the rules. Now the SEC is rewriting the rules. Looking into 2026, this may be one of the most consequential financial-infrastructure shifts to monitor. New blockchains and DeFi TVL milestones may matter less than a regulatory path for the world's largest asset class to move onchain—with U.S. stocks at the center and with tokenization no longer fully controlled by the companies being tokenized. Tokenized stocks have been marketed for years, and real liquidity remains limited. Still, if the SEC removes the last major legal uncertainty, the sector may be worth reassessing. A trading paradigm Nasdaq built over 50 years could, in theory, be reworked onchain in a fraction of that time.

NEW: Kevin Warsh is scheduled to be sworn in on Friday as the next chair of the Federal Reserve, taking over from Jerome Powell.